What Is the Korea-Bangladesh CEPA?
The CEPA (Comprehensive Economic Partnership Agreement) is a broader bilateral economic cooperation framework than a conventional FTA (Free Trade Agreement). It covers eight major chapters extending beyond tariff reductions to include investment protection, trade in services, intellectual property, e-commerce, government procurement, and economic cooperation. For Korea and Bangladesh, CEPA is a core trade agenda that could elevate bilateral economic relations to a new level.
Negotiations gained traction after the joint study was launched in 2014, and by March 2026 the two sides had reached the 25th round of talks. With Bangladesh's LDC graduation approaching in 2026, both governments have stronger incentives to conclude the agreement, and a substantive deal in 2026-2027 is increasingly seen as achievable.
Negotiation Progress: From Round 1 to Round 25
The Korea-Bangladesh CEPA talks can be divided into three broad phases: the exploratory phase (Rounds 1-8), the full negotiation phase (Rounds 9-18), and the closing phase (Rounds 19-25). In each period, both sides refined their priorities and points of contention, and the recent rounds have moved into detailed exchanges on concession offers and implementation conditions.
| Phase | Rounds | Period | Key Progress | Core Issue |
|---|---|---|---|---|
| Exploratory Phase | 1-8 | 2014-2018 | Joint study, scope alignment, TOR finalized | Negotiation scope (FTA vs CEPA) |
| Full Negotiation Phase | 9-18 | 2019-2023 | Chapter text talks, initial discussion on sensitive items | Agricultural opening, services liberalization |
| Closing Phase | 19-25 | 2024-2026 | Exchange of concession offers, detailed rules-of-origin talks | Tariff concession depth, implementation period |
Status Across the Eight Core Chapters
| Chapter | Topic | Progress | Current Agreement Level | Remaining Issue |
|---|---|---|---|---|
| Ch.1 | Trade in Goods | 80% | Base concession offers exchanged | Final deal on sensitive items |
| Ch.2 | Rules of Origin | 70% | General rules mostly aligned, product rules pending | CTH vs value-added threshold |
| Ch.3 | Trade in Services | 60% | Requests and offers exchanged | Scope of Mode 4 mobility |
| Ch.4 | Investment | 75% | Most provisions broadly aligned | ISDS procedural details |
| Ch.5 | Intellectual Property | 65% | Basic framework agreed | Patent protection period for pharmaceuticals |
| Ch.6 | E-Commerce | 85% | Close to agreement | Data localization obligations |
| Ch.7 | Government Procurement | 50% | Only basic principles agreed | Thresholds and exceptions |
| Ch.8 | Economic Cooperation | 90% | Agreement largely complete | Specific implementation programs |
Analysis of the Main Negotiation Issues
Sensitive Product Concessions
The biggest hurdle to conclusion remains the treatment of sensitive products on both sides. For Korea, the degree of market opening for Bangladeshi garments remains a major issue, while Bangladesh is concerned that steep tariff cuts on Korean machinery and electronics could create adjustment pressure on domestic industry.
| Priority | Korea Sensitive Products | Bangladesh Sensitive Products |
|---|---|---|
| Tier 1 | Garments and textiles (HS 61-63) | Machinery (HS 84-85) |
| Tier 2 | Agricultural and fishery products | Chemical materials (HS 28-39) |
| Tier 3 | Leather goods (HS 41-43) | Automobiles (HS 87) |
| Response Tools | Longer phase-in periods, TRQ | Safeguards, staged reduction |
Rules of Origin
Rules of origin will be decisive in determining the practical usability of CEPA. Overly strict standards reduce utilization because companies may opt to pay MFN tariffs instead of claiming preference, while standards that are too loose raise concerns over third-country circumvention. Korea favors a mixed approach combining CTH and value-added criteria, whereas Bangladesh seeks broader recognition of simple processing such as cutting and sewing.
Trade in Services and Mode 4 Mobility
Bangladesh places particular emphasis on Mode 4, or the temporary movement of natural persons. It seeks wider access for Bangladeshi IT engineers and construction workers in the Korean market, while Korea is focused on securing better access for construction and IT service providers in Bangladesh. Because the interests are closely linked, this chapter is likely to be resolved through a broader package deal.
Expected Effects Once CEPA Enters Into Force
How Korean Companies Should Prepare
The Korea-Bangladesh CEPA has the potential to become a genuine game changer in the bilateral economic relationship. Bangladesh's 2026 LDC graduation creates a clear deadline that is strengthening political momentum on both sides. Companies that prepare ahead of entry into force - especially on tariff planning, origin compliance, and buyer development - will be best positioned to capture the upside once the agreement is signed.